Investing

Our “Home of the Month” pick for May is this perfect vacation Starr Crest Resort cabin.

With the means to pay for itself when you’re not using it, this Starr Crest Resort cabin is a gorgeous true log cabin located on an over sized lot! The lot is very private, which is a rare find for Starr Crest! Make this your vacation home or a rental investment property.

Offering front and center views of the famous Mt. LeConte this 1,500 square foot cabin on Lone Eagle is conveniently located just under two miles from the Pigeon Forge Parkway and is only a few minutes more to the Great Smoky Mountains and Gatlinburg. This cabin features walls of glass with handsome wood interior, ample parking, and a spacious floor plan. Coupled with the great community amenities at this Starr Crest Resort cabin, it makes for the perfect mountain getaway. Best of all, the cabin has the potential to be a top performer on a rental program or rent it yourself on VRBO.

The resort’s HOA includes pool and playground access and takes care of the wide and easy-to-access roads.

This one bedroom rental cabin at The Preserve in Wears Valley is our “Cabin of the Month.”

With its amazing National Park views off of both decks, you will definitely want to check out this one bedroom rental cabin if you are looking for a fantastic rental investment opportunity in the Smokies! You will love the walls of glass, river stone fireplace, the upscale touches, hardwood floors, large beams and timbers. The loft serves as a large open game room, and the multiple decks offer plenty of privacy for you to enjoy the views of Smoky Mountain nature at its best!

This roughly 1,400 square-foot one-bedroom rental cabin is a true log cabin located in The Preserve, a very popular destination resort for many of the tourists who visit our area. The resort has its own wedding chapel and outdoor pavilion overlooking one of the most majestic mountain scenes around the area.

You’ll be hard pressed to find rental cabins with such fantastic views in this price range – this one bedroom rental cabin is in the top two most popular of its kind for this rental company.

This serene, private two bedroom Sky Harbor cabin is our featured “Cabin of the Month” for April! This true log cabin is the perfect second home or investment property! With a master bedroom on the main floor, this cabin’s 1,200 square feet space offers an open concept floor plan perfect for entertaining your entire family and guests. The oversized windows in your new investment’s cathedral ceiling bring in the majestically serene views of nature. You’ll adore the gleaming wood floors throughout.

Upstairs, the Sky Harbor cabin’s large open loft is equipped with a game room. The wrap around deck with its own private hot tub is the perfect place for relaxing in the evening with a glass of wine as you wind down from the day of exploring and/or shopping, thanks to the convenient location that puts this cabin just 10 minutes from the Parkway into Pigeon Forge, 15 minutes to Gatlinburg, or just a few minutes more into the National Park!

If you’d like to visit this Sky Harbor cabin, call me at 865-765-6157 or my support line at 865-654-2111 to schedule a showing.

Last month, I shared some important tips about what to look for when buying an investment and what to be thinking about during the search process. Once you’ve found the right property that meets your goals and meets those criteria, the next thing to be thinking about is what improvements you can make to it that will increase its overall value without costing you too much money. First and foremost, you want the investment property to be the best color it possibly can be.

Finding the best color

Sometimes it’s just a matter of painting, but don’t kid yourself – if you aren’t using the very best color choice, painting can ruin you as easily as it can profit you. Take that seriously. Don’t just let someone pick a color. Use a palette to compare colors before you start so that you pick the best color of paint for your home. And if you make the mistake of picking the wrong color, don’t be so prideful that you keep on painting with that bucket of paint because “it’s paid for.” I’ve done this.

True story! It was years ago when I was much younger and inexperienced, but an art major! As a matter of fact, I was fresh out of college and had started teaching art at a local middle school. So that made me a professional, right? Wrong! My sister asked me to choose the color for their new West Knoxville house. I was so excited! Armed with many paint chips, I chose the most darling shade of blue. Now, in my defense I need to tell you she loved blue and requested blue. However, there is blue, and there is blue! In a few short weeks after the paint dried on this marvelous shade of blue for the exterior of her house, the whole neighborhood was devalued due to the over the top Easter egg blue color of my sister’s house. Oh my! I learned a terrible lesson, and so did my sister! She has forgiven me, but the roughly 2-inch by 3-inch paint chip does crazy things when you blow it up to about 100 feet by 20 feet. At least, that was my excuse! By the way, her three young sons loved the blue house (which in hindsight should have been a hint that it was inappropriate).

So here is the trick to figuring out the best color for your new investment.

Get paint samples and get the color you want. Then get all the shades around the color you want – dark ones, light ones, muted ones. I repeat, muted ones – with grey and brown mixed in! Then, take them to houses and commercial buildings you like and match them. You are going to be shocked at how muted the shades you like are once they are on an exterior wall with the sunlight beaming down.

You can also use the paint brochures and the photos they provide to indicate the color used at the paint store. That can help you determine the best color to use. And if you aren’t sure, start by buying a small sample and try a small area. (You’ll thank me!)

Another excellent idea is to talk to your agent before you remodel. A good agent will know the best colors, materials, design, and décor to attract buyers. If you remodel it correctly, it could save you $20,000.

Also remember, something bought as an investment can be rented immediately (generally speaking). A property that was someone else’s mistake because it wasn’t reaching its potential for gross rental income numbers but is still showing rental history means it can continue to make at least that amount in the meantime.

Lastly, land is always king. If you have a choice between buying an investment property with land or one that is in a Planned Unit Development subdivision where the only land you actually have all to yourself is the part the structure sets on, go with land.

For our March “House of the Month,” we’ve selected this beautiful 2-bedroom cabin in Parkside Village.

Now you can own your own perfect getaway with this cozy two bedroom and two bath cabin smack dab in the center of Wears Valley! It’s located just minutes from town and offers easy access to either Townsend or the National Park. This is a mountain lover’s dream!

Well maintained and newly stained, this 2-bedroom cabin’s open floor plan will offer you the chance to relax with family and friends or enjoy a nice game of pool in the downstairs game room.

Turn this into your cash-flow nest egg today! Contact me at 865-765-6157 or call my support line at 865-654-2111 to visit this 2-bedroom cabin.

For our March “Cabin of the Month,” we’ve chosen this 1-bedroom cabin nestled in Parkside Village.

Taken care of by a great owner, this 1-bedroom cabin offers the perfect opportunity to get away from it all and just relax in the quiet of the woods. Located in the heart of Wears Valley, this is your chance to own your very own quaint one bedroom and one bath. Make it your second home or continue to enjoy it as an income producing rental property!

The great open floor plan flows well and is perfect for you and your closest family. Adorned with small handcrafted details that really make this cabin stand out from the rest. Step out onto your back deck that is wonderful for grilling or enjoying a cup of coffee on a crisp Tennessee spring morning. And of course, it comes equipped with a covered hot tub so that you can enjoy a relaxing soak, rain or shine!

If you would like to schedule a visit to see this 1-bedroom cabin, contact me at 865-765-6157 or call my support line at 865-654-2111.

The most common type of phone call we receive from buyers looking for real estate in our market usually starts out something like, “I’ve never really owned vacation rentals before but I want to buy one with great rental history!”

I always tell them, “Awesome, you want to become an investor! I can definitely help you with that!”

The conversation then turns to identifying what exactly they are looking for in an investment property and what their budget is for buying real estate. Once we have those parameters figured out, the next point to focus on is understanding what their long term plans are with buying real estate. Always be looking for real estate property with the expectation that you will sell at some point. This is the first, most important step in the process of buying real estate. We have found that it is fairly common for investment cabin owners to relist their cabins within five or so years. Either their investment strategies evolve leading them to buy other cabins or to invest in other ideas, or life happens and their focus on where they want to spend their investment dollars changes. So, always buy with the sale in mind. What does that mean? Well, it means there are several criteria you want to do your best to meet as you search for the best investment.

It’s got to be in a great location. Location is everything, as I’m sure you know. You’ve got to buy something in a great location. You can change almost anything about a home but you can’t change the location. You can’t move a house if it’s in a bad location. So how do we define “great location?” Well, in the Smokies, a great location is generally something that has a beautiful view of the mountains, is close to attractions, and is relatively peaceful. If your investment property doesn’t meet at least some of those criteria, it had better offer something incredibly unique that renters will find appealing.

Buy the lowest priced property of the best quality on the block. You definitely don’t want to own the most expensive home or cabin in the resort, and the reason is this: when you get ready to sell, you will have a hard time getting that piece of real estate to appraise for what you want from it. Appraisers look at similar properties in the same area of the property for sale as much as possible, and often times a property that is priced higher than the ones around it sold for has trouble getting approval for the price you are being offered. Without an appraiser’s stamp, a lender won’t be able to authorize the deal unless the buyer is willing to pay the difference up front. Most buyers using a lender usually can’t (or won’t). By going after something that is less expensive, you have enough room to maneuver as it appreciates in value.

Buy as high quality of property as you can afford. People are always looking for the best deal, and I personally love helping them finding someone else’s mistake that they can turn into a win. But even with that goal it’s important to remember that the cheaper something is, the more you will have to spend to turn it into a gold mine. You want to buy real estate property with good bones that will hold up better without much maintenance. On that subject, don’t buy something with an outdated, obsolete floor plan. You want to buy something that can be changed to keep up with the interior design trends. So buy something with potential to be great without having to completely rebuild from scratch.

Remember, the goal in real estate investing is to make money with the property, both on the front end over the years as you rent it and on the back end when you sell it for a profit. If you’re not striving to reach those two goals, it might be someone else buying your mistake instead!

Next month, I’ll take you through some of the strategies I encourage my buyers to use once they’ve found the “diamond in the rough” so that remodeling the home increases their profits rather than cutting into it.

In the meantime, if you have any questions about the local real estate market, my team and I are always here to help and answer questions.

For our “Cabin of the Month” of January, we’ve selected this vacation home in Cedar Falls.

Level lots are hard to come by here in the Great Smoky Mountains region, but this cabin is on one! It’s the perfect spot for enjoying time with your family around the fire pit! Enjoy the private setting of this vacation home located in the beautiful Cedar Falls resort, just minutes from Pigeon Forge! Step onto the wrap around porch with your fresh cup of morning coffee and take in all that nature has to offer, including your very own stream that runs right across your property.

This one bedroom, almost 1,400 square foot vacation home cabin utilizes an open concept floor plan with soaring ceilings, hand crafted gorgeous fireplace, wood floors, upscale furnishings and over-sized windows to take in nature. It is handicap accessible with a ramp entrance and wide doorways. You’ll find the cabin is a well maintained vacation home that comes equipped with 2 Master suites. Both have their own attached baths. The cabin also comes with its own unique carport for parking your vehicles.

This property has never been on rental but is in pristine condition and has excellent income potential. You can see other details about this vacation home here.

To learn more about this vacation home or to schedule a showing, call us at 865-654-2111.

We are finally reaching the end of 2017 and wow, what a year it’s been! We started with one of the worst tragedies our region has seen as we watched the Smoky Mountains and parts of Gatlinburg burn just over a year ago. So many vacation and rental cabin owners were devastated by the wildfires and we worked with many of them as they made the tough decision to either build back or buy something else. As the costs of materials and construction climbed over the year due to catastrophes in other parts of the country, even people who planned to rebuild their rental cabins slowly abandoned those plans because the price of doing that was just too much.

The rental cabin market in 2017

Not everyone who owned a cabin was eager to sell, though, so what we ended up with was a market of anxious buyers without enough cabins on the market to meet the demand. And many of them had cash from their insurance checks, so they were willing and able to pay a little more than someone who was new to the idea of buying a cabin, or who was working with a lender. The result was that prices of existing cabins began to steadily climb as well. The price to buy remained lower than the price to build throughout the year, and we still haven’t reached the point where building and buying are equal in price.

The number of residential properties, including rental cabins, didn’t quite reach the number sold in 2016, but the average price of such properties increased roughly $25,000 on average and our total sales for the Great Smoky Mountains region passed $540,000,000. Nearly 1,100 of the properties sold were vacation and rental cabins. With the flurry of buyers, we saw properties on the market sell very quickly, sometimes in less than a week if they were competitively priced or in a fantastic location for the right buyer.

So what does all that mean for 2018? Well, the number of residential homes and rental cabins for sale in our market will continue to be down and the market for buyers will remain a competitive one. This is good news for sellers but not good news for buyers. If you are thinking about buying a cabin, sooner is better than later. The longer you wait, the more difficult it will be to find a property within the price range you want to be in and the more competition you will have for what’s available. The market price for residential property will continue to climb until it reaches a point where the cost of building is a reasonable option. The most important thing to understand in that statement is that the cost of building isn’t likely to go down in the foreseeable future, either. So as the price of building climbs, it will be that much longer before building and buying are the same price.

Finally, none of this is exact science. In fact, there’s a lot more art to it than science. But what we do know is that the vacation rental cabin market is booming and because of that, cabin owners generally aren’t likely to sell their investment properties as long as they can make more with the rental income than they can from the sale of the cabin. The other factor for owners is the tax depreciation. Until that is used up, they will keep going. (Talk to your tax attorney if you want to understand more about how tax depreciation can be beneficial to you in the vacation cabin market.) And, the increasing number of buyers, especially people who are moving their investments from the coast line to the mountains, is expected to continue. This high number of buyers will drive the market.

As always, my staff and I are here to answer any questions you have about the rental cabin market.

Our featured ‘Cabin of the Month’ for December has incredible mountain views of the National Park!

Enjoy gorgeous mountain views all day at this 3 bedroom plus a bonus room and 4.5 bathroom cabin in Hickory Hollow! Its open, spacious floor plan is perfect for entertaining the whole family. You will adore the soaring ceiling accompanied by an amazing wall of glass where you can gaze the mountain views from the comfort of the main room.